CSP Risk Management & Mitigation 5

Question 1

A staffing firm places a worker at a client site without issuing a formal service agreement. If the worker is injured, what is the most significant risk this creates for the firm?

Accepted Answer

The firm lacks contractual protections for indemnification, safety obligations, and scope of work

Answer

Without a service agreement, the staffing firm has no contractual basis to allocate safety responsibilities, seek indemnification, or define the scope of the engagement.

Question 2

How does the WARN Act affect staffing firms when a client company that employs large numbers of temporary workers conducts a mass layoff?

Accepted Answer

The staffing firm may be obligated to provide 60-day notice if temps are counted toward the employment threshold

Answer

Temporary workers placed at a single site may count toward the 100-employee threshold triggering WARN Act obligations, potentially exposing the staffing firm.

Question 3

A staffing firm's employment practices liability (EPLI) policy is likely to cover which of the following claims?

Accepted Answer

A candidate's wrongful rejection claim alleging discriminatory hiring practices

Answer

EPLI policies cover claims alleging discriminatory, wrongful, or harassing employment practices, including discriminatory candidate rejection.

Question 4

Which recordkeeping practice is most important for defending against a misclassification audit by the IRS or DOL?

Accepted Answer

Documenting the behavioral, financial, and relationship-of-the-parties factors used to classify each worker

Answer

Documenting the three-factor analysis (behavioral, financial, type of relationship) used for classification provides the evidence base needed to defend an IRS or DOL audit.

Question 5

A staffing firm's client requests that the firm supply workers for a project in another state where the firm is not yet registered as a foreign business entity. What is the primary risk?

Accepted Answer

The firm may face state tax, employment law compliance, and registration penalties for operating without authorization

Answer

Operating in a new state without proper business registration exposes the staffing firm to penalties, back taxes, and unenforceability of contracts in that jurisdiction.

(CSP) Certified Staffing Professional Practice Test

(CSP) Certified Staffing Professional Practice Test

CSP Risk Management & Mitigation 5